Don't make enough to pay Taxes?

Question

In Canada, do you still have to do your taxes even if you didn't make anything this past year or didn't make enough to make the first tax bracket? (I'm a student)

In Canada, do you still have to do your taxes even if you didn't make anything this past year or didn't make enough to make the first tax bracket? (I'm a student)

I was born Sept 87. My problem is while I'm Canadian. I went to High school in the US and I used to pay US taxes...thus I don't get RRSP stuff I think (i turned 18 one month after I started univ in Ontario). I do wanna file it just to get my name on the database. Do i just have to submit it by April30th? Or is it due on that date?

Answer 1

I am also in Canada, and, as a tax consultant for the past 27 years, and as a former CRA employee (on contract), I can give you some very good reasons for filing your 2006 income tax return.

Firstly, if you have paid ANY tax whatsoever through your employer(s) in 2006, and you made less than $8,839.00 Federally, and less than $8,377.00 Provincially (Ontario), you have no taxes payable whatsoever.

Secondly, if you are 18 years of age (or older) and you worked less than the full year, then you may have a CPP overpayment.

Thirdly, if your earned income for all of 2006 was LESS than $2,000.00, you would have an EI overpayment.

You didn't indicate your age in your response, but you may also be entitled to claim the provincial sales tax credit on form ON479.

And, there is another possible claim, which is the GST tax credit, which you may also be eligible to receive, depending on your age.

If you file your 2006 tax return, you are also establishing yourself in CRA's database, and you may be eligible to file future tax returns by other methods, such as telefile or netfile.

If this is your very first tax return, then you would have to submit it to CRA in a paper format.

Finally, one of the best reasons for filing your tax returns as a student with little earned income is to establish what is called "RRSP room". Generally speaking, you can start contributions to an RRSP based on 18% of your earned income provided you file your tax returns. RRSP's are a very valuable tool, not just for retirement, but for future considerations such as purchasing a house, since any monies you deposit into an RRSP may one day be used towards the cost of owning your own home. RRSP contributions also reduce your taxes payable, and can provide a nice nestegg for your future goals.

Over the course of my business, I have seen many students disregard filing their tax returns, assuming since they made so little, why bother filing.

And, 99% of the time, these students were entitled to refunds based on having CPP/EI/tax overpayments, or entitlement to the sales tax/gst credit simply by filing.

My advice is to file your 2006 income tax return, even if the end result is nil, based on the RRSP room factor for future considerations.

Hope this helps you.

P.S. If your yahoo name is indicative of the year you were born (1987), you may also want to consider filing your 2005 income tax return, since you turned 18 that year, there may be tax credits available to you.

Answer 2

Think other way around make large enough to get more amount for yourself.